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Understanding "Tip Tolerance" on Holiday Gift Cards

Have you ever had a gift card declined at a restaurant, even though you know it had enough money to cover the bill?

This could be due to something called “tip tolerance,” where part of the gift card balance is held back for the gratuity.

On some credit card branded gift cards, there is a block in place if the card balance is not enough to cover the bill plus 20% for gratuity. This occurs in places where tipping is expected, like a restaurant.

If you have a $100 gift card, you might only be able to charge $80 on it for your bill at a restaurant. If the bill is $84.99, the card may get declined despite the fact that there is sufficient money on it.

For the most part, your server or the manager should be able to override this block if you say you will pay for remainder of the bill in cash or through another form of payment. If you are not allowed to split the payments, you may have to save your gift card for a different transaction.

Your card is not necessarily charged that additional 20%. That block is there to ensure that you have enough money to allow for a tip. If you only leave a 10% gratuity, you’ll still get to keep the remaining balance, as long as you get the card back.

The same scenario happens at some gas stations, where the gas station may sometimes pre-approve $75 at the pump, even if you only spend $30 on gas. You get the rest of the money back, but the gas station wants to make sure it’s there. If you do not have $75 on the card, you may need to go into the gas station and ask the cashier to charge an exact amount prior to pumping the gas.

About Justin Hefner

Justin Hefner is in the education field and has written about a number of financial issues. He holds a Bachelor of Arts degree from Texas Tech University and a Masters in Education from Texas State University.

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Editorial Note: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer affiliate program. See the online application for details about terms and conditions for these offers. Every reasonable effort has been made to maintain accurate information, however all credit card information is presented without warranty. After you click on an offer you will be directed to the credit card issuer's web site where you can review the terms and conditions for your offer.

Advertiser Disclosure: LowCards.com is an independent, for-profit web site. LowCards.com participates in the Affiliate Network, and receives compensation from most of the credit card issuers whose offers appear on the site. This compensation helps support our website and enables us to write insightful articles to help you manage your credit card accounts. This compensation, as well as the likelihood of applicants' credit approval and our own proprietary website guidelines, may impact how and where the cards appear on our site.

LowCards.com does not include all credit card companies or every available credit card offer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Every reasonable effort has been made to maintain accurate information, however credit card offers change frequently. After you click on an offer you will be directed to the credit card issuer's secure web site where you can review the terms and conditions for your offer.